Do you know anyone who formed their own B/D?

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Aug 7, 2010 1:56 pm

A local guy and his partner did this.  Why do I think it is creepy?  They have good Broker Checks.  Guess they just wanted to keep more cash.  oh, and don't tell me about Madoff.

Aug 9, 2010 9:09 am

Creepy...!?

I think putting a fish bowl in Olive Garden that says "Leave Business Card WIN a Free Lunch" is  ALOT more creepy than being an entrepenaneur...

Aug 10, 2010 12:23 pm

[quote=jackofalltrades]

Creepy...!?

I think putting a fish bowl in Olive Garden that says "Leave Business Card WIN a Free Lunch" is  ALOT more creepy than being an entrepenaneur...

[/quote]

Don't eat the bread at Olive Garden.  "that is how they get you"

Aug 18, 2010 3:55 pm

I know a couple of people that did it.  It took them months just to get approved to operate and thousands in expenses just to get to day one.  If you are thinking of going this route, either buy a firm that is sick of the regulators and take over their bd or better yet, just join an independent that uses a good clearing firm.  Let them do most of the headache work, do compliance, and take the legal risk  for 10% of your gross.  When you get above $3 to $4 million in revenue, consider forming your own BD.  Why anyone would do it prior to reaching those levels is beyond me.  The number of broker/dealers is shrinking.

Aug 31, 2010 4:48 am

First off, I agree that anyone who wants to do this is crazy in most situations, although I know a couple people who've done it.

First situation was a small boutique ibank specializing in M&A that needed a BD in case certain transactions would be officially categorized as public securities. This was done by filing from the start, and took forever while also costing an arm and a leg. Not really retail situation though...

Second situation was a retail guy who decided to buy and rename an existing BD. This option is apparently less of a hassle, although you're opening yourself up to any arbitrarions that result from the BD under previous ownership.